Rob Arnott – We Are Now In A Very Dangerous Environment
March 14, 2013
Today King World News interviewed the man who oversees more than $130 billion, and who has won an unprecedented six Graham & Dodd Awards. Rob Arnott, Chairman of Research Affiliates, spoke with KWN about what is fueling the global markets, and also warned investors we are in a, “… very dangerous environment.” Here is what Arnott had to say: “The main thing that is pushing the market higher is liquidity. You’ve got the Fed monetizing the nation’s debt, buying practically all of the new bond issuance by the federal government.”
Rob Arnott continues:
“With the Fed monetizing the debt they run a risk of debasing the currency, but meanwhile that money has to go somewhere. People don’t want to put the money to work in start-ups and developing new enterprises. So what we have is the effort to prop things up is really just propping up the stock market, not the macro economy.
It’s wonderful when you see this kind of thing happening to just say, ‘Well, I’m going to be along for the ride and then I will get out of harms way before things unravel.’ But how do you do that?….